Why Company Structures Dominate in Prime Central London

Walk down Eaton Square or Upper Grosvenor Street and you’ll find that much of the property is not owned by individuals at all but by companies. In Prime Central London (PCL), buying through corporate vehicles—usually Special Purpose Vehicles, or SPVs—has become the default approach for high-value transactions.

For buyers spending £5 million or more, the appeal of SPVs is clear. They provide tax efficiencies, allow for intergenerational planning, and, until recent transparency reforms, offered a layer of discretion. They also create flexibility when families, trusts, or offshore entities are involved in ownership. And importantly, many lenders themselves prefer lending to ring-fenced corporate vehicles rather than directly to individuals.

But while corporate structures are standard in PCL, they are far from straightforward. Each SPV must be set up and maintained correctly, lenders impose tight covenants, and compliance with Companies House and wider UK regulation must be immaculate. The very tool designed to simplify ownership can, if mishandled, complicate finance dramatically.

The Mechanics of an SPV

At its simplest, an SPV is a limited company set up to hold property and do nothing else. It has no other trading activity, meaning that lenders can assess it in isolation. This ring-fenced nature is precisely what appeals to both borrowers and lenders: the property and the loan sit cleanly within a single corporate entity.

For international buyers, SPVs are often combined with offshore holding companies, nominee arrangements, or family trusts. In practice this means a Belgravia townhouse might be owned by a UK SPV that is itself owned by a Jersey trust, with directors drawn from both the trust company and the family. While entirely legitimate, these arrangements invite scrutiny. Every shareholder and director must be disclosed, beneficial ownership registers must be filed, and lenders demand full transparency on source of wealth.

We explored some of this in our blog on SPVs versus trading companies, where we noted why lenders treat ring-fenced vehicles differently. In Prime Central London, where values stretch from £5 million pied-à-terres to £50 million trophy homes, lenders view SPVs as the only acceptable route.

How Lenders Assess SPV Borrowers

Lenders’ reactions to SPV borrowers in 2025 depend heavily on who they are. Mainstream banks remain wary, often demanding personal guarantees from directors or refusing to lend at all if ownership is layered through offshore structures. Specialist lenders, while more flexible, tend to price for risk—offering higher interest rates and lower loan-to-value ratios.

Private banks occupy the middle ground, and in many ways, dominate this market. They not only accept SPV ownership but actively prefer it. For them, lending to an SPV is tidy and secure, provided the borrower’s wider wealth profile justifies the exposure. However, this acceptance comes with conditions. They want guarantees from principals, comfort that accounts will be filed correctly, and evidence that the property is part of a broader, long-term wealth strategy.

In short, the SPV itself rarely secures the loan. It is the strength of those standing behind it—the individuals, families, or trusts—that reassures lenders.

The Growing Weight of Bank Covenants

One of the most overlooked aspects of SPV borrowing is the covenants lenders attach. In private discussions with clients, we often explain that corporate borrowing is not just about the headline loan-to-value ratio. Banks impose conditions designed to protect themselves if markets turn.

These covenants can include limits on further borrowing, requirements to maintain interest cover ratios if rental income is part of the structure, or restrictions on how the SPV can distribute profits. Even when the property is purchased for personal use rather than investment, banks may still impose covenants to ensure financial discipline.

This is particularly evident at the upper end of the market. In our blog on large mortgage loans, we noted how scrutiny intensifies above the £5 million mark. For SPVs, covenants often go beyond property performance to include personal guarantees, minimum asset levels, or requirements to maintain broader banking relationships.

Registrar Obligations and Compliance Realities

Company buyers also carry the burden of registrar compliance. UK SPVs must file annual accounts, maintain registers of Persons of Significant Control, and ensure all filings at Companies House are current. For lenders, these are not box-ticking exercises. A single missed filing can raise red flags about governance, creating delays in the underwriting process.

For international buyers, particularly those using offshore holding structures, disclosure requirements are even more rigorous. Lenders demand detailed organisational charts, trust deeds, and supporting documentation that traces funds back to their origin. In practice, this means that a client using an offshore trust to buy in Knightsbridge may face weeks of document requests unless the structure is carefully prepared.

We have seen transactions unravel simply because the ownership chain was unclear or filings were out of date. In the hyper-competitive PCL market—especially for off-market deals where exchange deadlines are tight—such delays can be fatal.

Scenario: Structuring a Mayfair Acquisition

This scenario illustrates both the risks and rewards of SPV ownership. A family office client was acquiring a £20 million apartment in Mayfair. The chosen structure was a UK SPV, ultimately owned by a Guernsey trust.

The lender, a private bank, insisted on full disclosure of the trust, guarantees from family principals, and confirmation that Companies House filings were accurate. They also imposed covenants restricting the SPV from taking on further debt without bank consent. On paper, the requirements looked onerous. Yet because the structure was properly prepared and the client’s wealth profile was strong, the loan was agreed and completed within six weeks—remarkably fast for such a complex transaction.

Without that preparation, the deal could easily have stalled. The key was aligning the legal, tax, and financing strategy from the outset rather than treating them as separate silos.

What Happens When Structuring Goes Wrong

Not all transactions run so smoothly. In other cases, we’ve seen deals falter because beneficial ownership was unclear, registrar filings were overdue, or directors resisted providing guarantees. In one instance, a buyer attempted to use a trading company rather than an SPV, creating confusion over accounts and making the lender nervous about unrelated liabilities. The deal collapsed at valuation stage.

These experiences highlight a simple truth: lenders in PCL are unforgiving when documentation or structure is weak. The sums involved are too large, and the market too sensitive, for shortcuts.

The Lending Landscape in 2025

The broader lending environment in 2025 reflects this tension. On the one hand, PCL remains one of the world’s premier destinations for international wealth. Families, entrepreneurs, and investors continue to buy trophy assets, and SPVs remain the vehicle of choice. On the other, regulators have tightened rules around transparency, and lenders are under pressure to demonstrate robust due diligence.

Private banks remain the most active participants in this market, but they demand clean structures, complete compliance, and personal accountability from those behind the SPV. Specialist lenders provide alternatives but often at higher cost. For borrowers, this means preparation is everything.

How Willow Can Help

At Willow Private Finance, we specialise in guiding clients through the complexities of SPV borrowing in Prime Central London. That means not just securing finance, but ensuring every element of the structure aligns with lender expectations.

We advise on how SPVs should be set up, connect clients with legal teams who ensure Companies House filings are watertight, and prepare lenders with full organisational charts and source-of-wealth documentation. We negotiate covenants so they provide flexibility rather than constraint, and we match clients with lenders who understand that corporate ownership in PCL is a standard practice, not a red flag.

For international clients, we also coordinate the interface between offshore structures and UK lenders—helping to turn what might feel like a barrier into a pathway for successful funding.